A regional Internet service provider (ISP) is interested in whether a 15% discount on its price for its highest-speed service will notably impact customer retention. To answer this question, the ISP randomly chooses 75 of the 150 markets it serves to receive the 15% discount and keeps prices the same in the remaining 75 markets. After six months, the ISP observes the following: • For the markets receiving the discount, the average retention rate was 0.93 (i.e., 93%), with a standard deviation of 0.255. • For the markets not receiving the discount, the average retention rate was 0.88, with a standard deviation of 0.325. Using a 95% confidence interval, determine whether you can state with 95% confidence that the discount improved the six-month retention rate.
A regional Internet service provider (ISP) is interested in whether a 15% discount on its price for its highest-speed service will notably impact customer retention. To answer this question, the ISP randomly chooses 75 of the 150 markets it serves to receive the 15% discount and keeps prices the same in the remaining 75 markets. After six months, the ISP observes the following:
• For the markets receiving the discount, the average retention rate was 0.93 (i.e., 93%), with a standard deviation of 0.255.
• For the markets not receiving the discount, the average retention rate was 0.88, with a standard deviation of 0.325.
Using a 95% confidence interval, determine whether you can state with 95% confidence that the discount improved the six-month retention rate.
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